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When a student loan is forgiven, you don’t have to pay the debt back. However, in most cases, the forgiven balance could then be considered money you received as a benefit, making it taxable income.
To avoid also be subject to self-employment tax, I suggest you post it using these guidelines.
None of these apply is no longer an option. We received additional forgiveness from the TX Higher Education Fund for teaching a low-income school for 5+ years. They classified this as a 1099-NEC. We are not self-employed.
The new rules have your student loan forgiven with no tax implications through 2025. You will need to report it, since you received the form and then subtract the income back out. The program and worksheets are just that, we need your actual tax return to be correct. Follow these steps:
Step 1:
Report the NEC
Step 2:
Subtract the income from your return
See Topic 431 @IveBeenDupedByTurb0t4x
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